Bill Boersma: On Life Insurance

Policy owners can benefit greatly from a simple concept

Back in the day, the life settlement market was as crazy as the Wild West. Funders were making insane offers on anything you’d throw in front of them. A dozen years ago, with the financial collapse and significant changes in life expectancy calculations, things changed dramatically, and the market largely dried up.

Fortunately, for policy owners, the market is still alive and well. I’m currently working on a couple of situations in which policy owners have been well served by the existence of a currently thriving life settlement market.

Recent Cases

In one case, a trustee called me because a $2 million trust owned policy was collapsing, and the insured had made the decision to surrender it for its cash value of $85,000. This was a Transamerica policy that was subject to terribly dishonorable tactics. When Transamerica decided it didn’t want to pay death benefits on a certain book of business, it simply jacked up the mortality expenses dramatically even though it didn’t realize adverse mortality experience. This was also a strategy to make the policies less attractive to the life settlement market. For full post, click here…